Monthly Monetary Report

Monthly report on the evolution of the monetary base, international reserves and foreign exchange market.

Summary

• During the month of October, M3 increased by 1.5%, accelerating its year-on-year rate of expansion, driven by private sector time deposits in pesos. This segment of deposits reached a monthly growth of 3% ($4,500 million) and 52% in the last 12 months.

• So far this year, loans in pesos to the private sector continued to explain most of the growth in the quantity of money. In October they increased 2.7% ($8,300 million), driven by financing instrumented with documents and personal loans. Thus, the year-on-year rate of change of loans in pesos to the private sector stood at 37.5%.

• In October, a tender was held within the framework of the Bicentennial Productive Financing Program. On this occasion, $110 million was auctioned, of which $105 million was awarded. Thus, the total awarded since the beginning of the program amounts to $5,128 million. For its part, the total funds disbursed reaches $3,618 million, which represents about 70% of the total funds awarded. Among the main destinations of the funds are the acquisition of machinery and equipment, and the construction and remodeling of buildings for commercial purposes, which, together, account for about 85% of the amounts disbursed.

• Within the framework of the “Credit Line for Productive Investment” (Communication A 5319), between July and October, financial institutions would have disbursed an amount equivalent to approximately 50% of the loans to be placed ($14,900 million). The total disbursed was distributed in similar parts among large companies and MSMEs, and the sector that received the most loans was the industrial sector, which concentrated 30% of the financing; followed by commercial with 23% share.

• The bank liquidity ratio of the segment in pesos (calculated as the sum of cash in banks, the current account of the entities in the Central Bank, net passes, and the holding of LEBAC and NOBAC, in terms of total deposits in pesos) decreased 0.7 p.p. compared to September, standing at 34.8%.

• In October, the first stage of the readjustment of the Minimum Cash regulations came into force to promote the geographical coverage of the system and the attention of regions with less economic potential and lower population density. Specifically, as of this month, differential reserve coefficients by area began to apply.

• During the month under analysis, the Central Bank validated increases in the short section of the yield curve of LEBAC tenders in the primary market.

• Short-term passive interest rates paid by private entities continued the upward trend observed in recent months. In the wholesale segment, the BADLAR rate of private banks – interest rate on deposits of $1 million and more with a term of 30-35 days – averaged 14.9%, registering an increase of 0.6 p.p. compared to September. For its part, in the retail segment, the interest rate paid by private banks for their fixed-term deposits (up to $100,000 and up to 35 days) averaged 12.6%, increasing 0.4 p.p. in the month.

• On the other hand, active interest rates showed dissimilar behaviors. The interest rate applied to loans instrumented through signature documents remained at the levels of the previous month (17.9%). Meanwhile, the monthly average interest rate on secured loans stood at 20.5%, falling 0.4 p.p. in the month; while the interest rate on personal loans decreased 0.7 p.p. in October, averaging 33.6%.